London stocks fall after Trump issues tariff threat; Beazley hits record high

Jan 19 (Reuters) - London shares fell on Monday as U.S. President Donald Trump's tariff threats against Britain and seven other European nations sent shockwaves through global markets, though a bright spot emerged as insurer Beazley surged to a record high on a sweetened takeover bid from Zurich Insurance.

The blue-chip FTSE 100 .FTSE finished 0.4% lower. The domestically focused mid-cap index .FTMC fell 0.9%, marking its steepest one-day decline since late November.

Trump said on Saturday he would impose an additional 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain starting February 1. Those tariffs would climb to 25% by June 1 unless the U.S. was allowed to buy Greenland.

The announcement unsettled global markets, with volatility returning to trading floors.

Major EU states condemned the tariff threats as blackmail, and France proposed responding with a range of previously untested economic countermeasures.

British Prime Minister Keir Starmer, meanwhile, called for calm discussions to resolve the stand-off.

The tariff threats also cast a shadow over trade deals the U.S. struck with Britain in May and the EU in July. Both limited agreements have already drawn criticism for their lopsided nature, favouring Washington.

Losses rippled across London's stock market, with automobiles and parts subindex .FTNMX401010 sliding 1.8% lower.

Luxury retailers too bore the brunt, with Burberry BRBY.L and Watches of Switzerland Group WOSG.L leading the losses with falls of 2.8% and 2.3%, respectively.

However, the non-life insurance sector .FTNMX303020 provided a bright spot, cushioning the FTSE 100 from broader investor nerves. Beazley BEZG.L soared 42.9% to a record high after Zurich Insurance Group ZURN.S offered 1,280 pence per share for the British speciality insurer.

Peers Hiscox HSX.L and Lancashire LRE.L also rose 9.1% and 4%, respectively.

Moreover, precious-metal miners .FTNMX551030 surged 3.1% as gold and silver hit record highs amid a flight to safety.

Among other movers, WH Smith SMWH.L jumped 11% after the travel retailer named ex-Balfour Beatty chief Leo Quinn as executive chair, replacing Annette Court in a leadership shake-up aimed at reviving the business and restoring investor confidence.